LOANS ARE NOTHING APART FROM IRRESISTIBLE BLANDISHMENTS

We all should avoid taking loan for as long as you can. WHY?

A loan is a debt that appears to be very lucrative and flattering. It is the easiest way of getting money to fulfill our ambitions instantly, thus making us feel proud of ourselves in moving forward towards making our dreams come true. But, what we are totally unaware is that, this is exactly where our fairy tale comes to an end.

These loans are nothing apart from irresistible blandishments. The bank representatives run after us to convince us that these loans will change our lives and upgrade the standards of living of a common man. But does this exactly happen? He shows us the polished side of the frame and we usually fall into the trap.  A common man who is surviving on his limited earning puts an extra burden on to his shoulders. It’s definitely an addition to his routine expenditures that disrupts his monthly budget. Even paying through Credit Cards is no solution to this because we also pay service tax and miscellaneous levies onto it.

Today you can buy even a smallest of the product on small monthly installments (EMI's). What are these EMI’s?  Have we ever given it a thought? You are approved for a small loan within minutes and the money is transferred via direct deposit to your account within no time. Why?

We all should know all this because there are some very serious financial drawbacks to taking any such kind of loan. It is provided on an interest rate, evidenced by a note that specifies other definite conditions along with the date of repayment for a specific period of time.

Because such loans are often sought out by those people who cannot afford to purchase the particular product  by means of cash, so to satisfy the  urge for that same, he /she opts for a loan regardless of what they can face in the future. The scheme that seemed to be a very calculative healthy decision initially, later turns out to be a major fault of our life. With interest rates that are simply astronomical, hidden fees, aggressive collection practices, we regret each and every moment when this particular decision was made.

While loans are easy to obtain, one thing is for sure that they are not a solution to our predicaments. They definitely cost us huge in the long run. If a person in a tight financial situation takes a loan then he should be well aware that in reality he might actually be making his financial position much worse because there is no such thing as easy money.

The banks are pretty smart operators. Giving such loans are an asset for them as they are earning a great amount on to the money given by them, but on the other hand the borrower is loaded with its  High Interest Rates and monthly EMI's.  While your loan is meant to be a short-term fix, you wind up paying an exorbitant amount of money on interest alone. Keep in mind that when you sign up for any loan, the lenders will request that your transactions be performed through direct deposit or electronic transfer, which means they will have direct access to your bank account when they assess their interest rates. Secondly there is the hidden fees. There are several hidden bank processing charges that are to be paid by us. These fees are additional to the loan capital and interest rates, making that particular loan a very expensive scheme for borrowing money.

A big reason why loans have become so common is because of the banks aggressive lending practices and lucrative offers that entice us to go ahead. We must understand that we may be  paying double or even much more on whatever facility we are availing from it on the principle amount and that too if we are paying the installments in time.  On one or more defaulters of the installments, we start paying compound interest and what not, thus increasing in more price rise. The next time when you are tempted to take out a loan, stop and consider the financial implications over the long run.

These rising delinquencies spell trouble for those who become defaulters by not being able to pay their monthly installments in time. On being a defaulter, the collection practices of the bank make your life miserable. The collection agents threaten you with prosecution into paying off your balance. Their eyes are like a watch dog on to your bank accounts. The moment the required amount is reflected, the EMI may be deducted. Your problems are your own to handle. Moreover if still you are not able to regularize your account, then not a moment is taken to take back the product into their custody and you still carry the liability on to your shoulders. Your CIBIL {Credit Information Bureau (India) Limited} rating gets poor and you end up trapped in an unescapable situation. Moreover the bank may also snatch back the product you bought from that particular loan and if any collateral security is given, it also takes that into its custody to auction it at its own free will at a throw away price.

Just understand the whole scenario and why you have no say in it. We are a private consumer standing all alone. The bank and its people are officers protected by the Court of Law. The Judiciary is always with the banking sector due to stringent banking laws. When we go to the Court it takes years and years to come to any solution, but when these organizations approach the court, they get immediate orders to act accordingly.

World Bank (WB), International Monetary Fund(IMF), Asian Development Bank(ADB) and European Central Bank (ECB) etc. are some of the institutions which are seen to be providing different kind of loans to various countries at  soft rate of interest. It has been observed that EMIs are not being paid by countries on regular basis resulting into Heavy Debt burden that directly or indirectly is affecting the growth of the economy of the countries. It can be clearly visualized that if countries are unable to repay back loans that are provided at very low rate of interest, then apathy of a common man can easily be ascertained in the present scenario of taking loans at a high rate of interest.

The bottom line of the whole is that we should think a number of times as to what we are drowning ourselves into before being a victim of such unfavorable lucrative schemes offered to the innocent people for their own interest, whereas in reality is exactly the opposite.

Always be happy and satisfied with what we have and work hard for the betterment of our future. Remember- what we now have was once among the things we wished for. Stop being frustrated by comparing yourselves to others because when you compare yourself to someone else, you'll always find someone who has it better than you. So- why do it? It is always better to enjoy the moonlight than to reach for the moon.

Try to overcome temptations. Temptations are a sign that you're not focusing on yourself but are trying to seek escapism. Don't ignore reality, find the good things and overcome your mistakes to make one’s own reality as good as his dreams.

Live in simplicity so that you can set an example to others also.... as the truth is, too much stuff is mess and weighs us down. Realistically, how much of that stuff in your house do you really need and use regularly?

Always be grateful and thankful to God.  Being grateful keeps you healthy and strong. Whatever you have already got - be it health, loved ones, career, interests, hobbies, a car, clothes, a home, great views, talents, etc., is far more valuable than whatever others may be having. Always keep in mind that, where we take all of these for granted, there may be those who must be envying us for what we have. Always have a confident attitude because this shall help you to focus on your strengths.

 “Happiness is self-contentedness.”

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